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A handout photo from Talisman Energy.

Talisman Energy Inc. has agreed to be acquired by Spain's Repsol SA in an $8.3-billion (U.S.) deal that allows Repsol to expand in Canada and internationally at a time of weak energy markets.

Under the deal, which has the unanimous support of both companies' boards, Repsol will pay $8 for each Talisman share, the equivalent of $9.33 (Canadian), the companies said. Including debt, the total value of the deal is about $13-billion (U.S.).

The transaction ends months of uncertainty for Talisman as it sought to bolster its finances and sell assets against a backdrop of oil prices that have fallen dramatically, recently to five-year lows. It also means the end of another in a line of Canadian-based independent oil companies that had expanded internationally through acquisitions.

Talisman said the offer represents a 75-per-cent premium to its average share price over the last seven days.

The combined company will produce 680,000 barrels of oil equivalent a day, a 76-per-cent increase to Repsol's current output, and have a presence in more than 50 countries. Its workforce will number 27,000, said Calgary-based Talisman.

"This deal creates significant and immediate value for Talisman stakeholders," Talisman chairman Chuck Williamson said in a statement. "Importantly, the deal underscores Repsol's strong belief in the high quality portfolio that Talisman has worked hard to develop."‎

Talisman shares were up about 47 per cent just after the markets opened Tuesday.

Under chief executive Hal Kvisle, Talisman had been working to sell assets to reduce debt and refocus its resources on profitable operations in North and South America as well as Southeast Asia. However, the swift drop in oil prices, and high capital commitments in the company's money-losing U.K. North Sea joint venture, made the turnaround difficult.

It disclosed it was in talks with cash-rich Repsol a week ago. The deal is expected to be completed in mid-2015.

"This is a transformative and exciting deal which will make us one of the world's most significant players and which will allow us to grow as a company and reinforce Repsol as a solid and competitive integrated player," Repsol chairman Antonio Brufau said.

London-based Canaccord Genuity Ltd. analyst Richard Griffith said the acquisition of Talisman is "probably a relief for Talisman shareholders."

The transaction "gets [Talisman] out of a bit of a bind. They needed to do a lot of things corporately to clean up the balance sheet," he said in an interview Tuesday.

But initial reaction to the deal from analysts on Repsol's conference call was "lukewarm," Mr. Griffith said. "Nobody was congratulating them on the deal, which is unusual."

A major concern, he said, is what actions Repsol intends to take to improve the Talisman portfolio of assets, of which the North Sea assets are "universally regarded as poor quality."

"In terms of strategic fit, you wouldn't describe [the Talisman acquisition] as perfect," Mr. Griffith said. "It's not a steal."

BMO Capital Markets analyst Brendan Warn said Repsol is "taking a bullish view on the oil price recovering."

The price Repsol is paying is "definitely a healthy premium compared to other transactions in Canada," he said.

With files from Carrie Tait in Calgary and Bertrand Marotte in Montreal

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